Biotech Breakthrough

Local drug developer Adenosine Therapeutics was acquired Monday by Clinical Data, a global biotechnology company, in a deal that could be worth up to $66.2 million.

Clinical Data is paying $11 million in cash for Adenosine Therapeutics, as well as entering into a five-year promissory note for $22 million and a 32-month promissory note for $3.2 million.

Clinical Data also agreed to a contingent payment of $30 million in cash based on the achievement of certain regulatory and commercial “milestones,” which the company did not identify.

The deal is one of the largest offers for a University of Virginia spinoff company — one developed as a result of research at UVa — according to Robert MacWright, executive director and CEO of the UVa Patent Foundation.

“I think it’s a wonderful success,” MacWright said. “They’ve done a lot of hard work over the years.”

Adenosine Therapeutics, started in 1999 by UVa professor and researcher Joel Linden and entrepreneur Robert Capon, researches the uses of the molecule adenosine to treat diabetes, sepsis, asthma, Parkinson’s disease, sickle cell anemia and other illnesses. Adenosine is a building block in DNA and RNA and it is produced in many organs andtissues in the human body.

Currently, Adenosine Therapeutics holds more than 30 patents or patents-pending for technologies.

Capon, CEO of Adenosine and founder of Virologic, a publicly traded company, said the partnership with Clinical Data would provide Adenosine
Therapeutics with the funds to conduct Phase III clinical trials, the last stage of development before drugs can be approved, marketed and sold.

In a news release, Clinical Data announced its intention to take Stedivaze, a drug developed by Adenosine Therapeutics, into Phase III testing in 2009. Stedivaze could be used as a tool for diagnosing heart disease as an alternative to other drugs, potentially producing fewer side effects.

“This transaction broadens our portfolio of drug candidates in selected specialty markets,” said Drew Fromkin, president and CEO of Clinical Data, in prepared remarks.

“This deal was made on very favorable terms, and is precisely the sort of opportunity we have been seeking to leverage our pharmacogenomic expertise against a promising set of clinical and preclinical drug candidates.”

Clinical Data could provide not only funding but expertise in moving Stedivaze and other drugs through the stages of clinical research, FDA approval and marketing, Linden said.

Linden has researched the uses of adenosine since the 1980s at UVa, following on the research of the late Robert Berne, a scientist at UVa. Linden initially studied the effects of adenosine on inflammatory responses, such as arthritis, and autoimmune diseases including lupus and type 1 diabetes.

Linden and Capon started Adenosine Therapeutics with private investment and help from the UVa Patent Foundation, which provided licensing, patenting and facilities on West Main Street.

The research side of the company was moved to the UVa Research Park, commonly called North Fork, where more than 30 employees currently work.
Capon said Adenosine Therapeutics and all its employees will remain at North Fork.

The breakthrough for Adenosine is just the kind of biotechnology and research-related economic development that is seen as a key to diversifying the regional economy and creating technology-based jobs to replace those lost in the region’s dwindling manufacturing base.

Michael Harvey, director of the Thomas Jefferson Partnership for Economic Development, said in a recent interview that biotechnology is apromising area.  Research and entrepreneurship are two of the seven main areas of focus in the partnership’s upcoming comprehensive plan.

Linden said he would continue in his capacity as a consultant for Adenosine Therapeutics.

“We hope the company will continue to do well … and create jobs in the Charlottesville community,” he said.